Saturday, September 27, 2008



HAVANA, Sep 26, 2008, 2008 (IPS/GIN via COMTEX) -- In Cuba the
shockwaves left by hurricanes Gustav and Ike will prevent any peace of
mind for people not only in the most affected areas but in the whole
country for a long time to come.

They are asking themselves if the worst is really over yet.

"The hurricane season lasts through November. If another one strikes,
what will become of us?" asked Georgina Fernndez anxiously. She lives in
Havana but has relatives in Pinar del Rio, one of the provinces hit
hardest by Gustav and then Ike, between Aug. 30 and Sept. 9.

Fernndez's fears are not without foundation. During the Atlantic cyclone
activity season, which began in June, the most dangerous months for Cuba
in terms of storm frequency tend to be October, September and August, in
that order.

In the central province of Santa Clara, small farmer Ruben Torres lost
his plantain and cassava harvest, as well as his avocado trees. "I'm
thankful to have saved the rice I planted," he said, after estimating
that Ike's direct path was within about 62 miles from his farm, out to sea.

"I think the situation is serious, because if the hurricane caused us
damage from that distance, imagine what it must be like in the provinces
where it made landfall," Torres said in a telephone interview with IPS.
According to his calculations, however quickly farmers plant now to
recoup their losses, their produce will not be available until well into
the first half of 2009.

Meanwhile, vegetables are becoming scarce, and consumers complain on a
daily basis about price increases, especially in the farmers' markets
where prices are set by supply and demand.

Cuba was still assessing the cost of the damages Gustav caused in the
west of the island on Aug. 30, when Ike entered the east of the country
on the night of Sep. 7, swept over the island and out to sea, where it
picked up strength before returning to the island the following day,
sweeping across virtually the whole country on Sep. 8 and 9.

An official report gave a preliminary estimate of $5 billion for the
losses caused by Ike and Gustav. Seven people were killed, dozens were
injured, thousands of acres of crops were ravaged, nearly half a million
homes were partially or totally destroyed, and essential infrastructure
was seriously damaged.

The impact of the hurricanes exacerbated the economic and financial
problems in the country, which urgently needs to increase food
production and reduce imports. The government had already warned that
owing to high prices on the international market, the cost of ensuring
the basic food basket and fuels would be considerably higher in 2008.

According to official statistics released in June, Cuba spent $1.47
billion on 3.4 million tons of food in 2007. At present prices, the cost
would be $2.47 billion. At the same time, the island's consumption of
158,000 barrels of oil per day now costs $11.6 million a day, 32 percent
more than in 2007.

Economists agree that the cost increases of imported goods exert upward
pressure on prices in Cuba. Early evidence for this was the more than 50
percent rise, on average, of the cost of gasoline and other fuels at the
state network of service stations from Sept. 1.

"It is possible to predict a significant knock-on effect of the price of
petrol on prices in the agricultural and livestock markets, because of
the role played by fuel in transport and agricultural production costs,"
Cuban economist Pavel Vidal wrote in an article on the subject.

He warned, however, that "the worst" option, which would create the
greatest distortions, would be to introduce price controls at the farm
produce markets. This idea was posited as a possible emergency solution
by Ariel Terrero, a commentator on economic topics on state television.

In Vidal's view, such a step would "fuel the black market, distort
prices and restrict the signals and incentives that prices exert on
producers, which are necessary for the adjustment and recovery of food

Above and beyond academic debates, the government has accelerated the
process of receiving applications from private farmers and cooperatives
interested in being granted the use of idle or poorly exploited state
land to grow crops or produce livestock.

In the first three days alone, more than 16,000 applications for a total
of over 494,000 acres were received, Terrero said Tuesday.

The decision to grant new plots of land to farmers is one of the changes
promised by Cuban President RaGBPl Castro in order to boost yields and
increase food production.

But academic researchers consider that it is also necessary to "release
productive forces" by establishing clear rules, expanding the market in
order to bolster production and work, eliminating excessive
centralization and revoking financial and productive restrictions on
companies, among other measures.

Meanwhile, the Agriculture and Sugar Ministries have made public a set
of 85 measures to organize the recovery process, including prioritizing
available resources for areas that ensure increased production as soon
as possible, and the institution of payment systems that will accelerate
the island's recovery.

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